Investment Property in Balikpapan

Investment Real Estate in Balikpapan

Investment Property in Balikpapan
Investment Property in Balikpapan

Balikpapan property investment can be a worthwhile venture if you are selective with the areas you choose to invest in. If not, you could find that your investment suffers due to low rental yields, dwindling demand, and slow property price growth in many parts of Balikpapan.

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Search Map of Balikpapan Investment Real Estate

Balikpapan is a seaport city in East Kalimantan, Indonesia. Located on the east coast of the island of Borneo (Kalimantan), the city is the financial center of Kalimantan and the main gateway to the new capital of Indonesia. Balikpapan is the city with the largest economy in Kalimantan with an estimated 2016 GDP at Rp 73.18 trillion. The city has both the busiest airport and seaport in Kalimantan, namely Sultan Aji Muhammad Sulaiman Sepinggan Airport and Port of Semayang. With a population of 645,727 as of 2018, Balikpapan is the second most populous city in East Kalimantan, after Samarinda. Balikpapan has been consistently ranked as one of the most liveable cities in Indonesia.

Balikpapan was originally a fishing village built by Buginese people in the 19th century. The first oil drilling began in Balikpapan on 10 February 1897, which was later set as the anniversary of the city. In 1899, the Dutch East Indies colonial administration granted a township status to Balikpapan. In 1907, Bataafsche Petroleum Maatschappij (BPM) made the city as its headquarters and imported skilled laborers, engineers, and managers from overseas. Subsequently, numerous multi-national companies came to Balikpapan to invest in the oil industry. This resulted in the economic boom of Balikpapan and attracted many migrants and expatriates.

During World War II, the Empire of Japan occupied the city in 1942, as part of the occupation of Indonesia, and it was bombed by the Allies in first Balikpapan Battle in 1942 and second battle in 1945. The battles impacted critical infrastructure, including the oil refinery stations and seaport which were completely burned to the ground. Upon Indonesia’s independence, BPM extended its activities in Balikpapan until 1965 when Pertamina, the Indonesian state-owned oil company, took control over the ownership of BPM and its oil exploration activities.

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The financial stability of Balikpapan has translated into a real estate market that rewards forward planning and a willingness to look beyond areas of traditional affluence.

Buy to Rent in Balikpapan

Renting out your Balikpapan buy-to-rent investment property can grow wealth and income.

Whatever your goals with investment property in Balikpapanare – preparation is key.

  • Set goals based on how much rental yield will be required and the local rental yield rates in Balikpapan and be prepared to change your initial outlook.
  • Thoroughly research the Balikpapan location with a special emphasis on fringe areas outside the main Balikpapan metropolis that may be valued lower than their better-known neighbours. Rental yields of around 5% are still attainable in certain areas of Balikpapan.
  • Ensure that your target investment property in Balikpapan appeals to professionals. This is a demographic that ensures maximum income and low voids.
  • Finding and vetting suitable tenants is a job ideally left to the professionals. Working with an established letting agent such as Physis Realty with local knowledge and experience of property legislation will give you the best chance of success.
  • You may think that managing your Balikpapan properties yourself is an easy option, but are these savings justifiable when you run into Balikpapan red tape? Physis Realty Balikpapan office in downtown provides you with peace-of-mind and leaves you time to plan your next move in the growing Balikpapan buy-to-rent sector.

With our expert guidance, investing in Balikpapan provides the secure knowledge that your money is working harder than it would in a local Balikpapan bank and that future generations of your family will be left with substantial capital growth assets.

We are always happy to advise on buying investment property in Balikpapan, where we have been established for over 35+ years. Physis Realty has been a firm fixture in the Balikpapan property market through good times and bad. Our experts have seen it all and our portfolios continue to outperform.

Flipping Investment Property in Balikpapan

Flipping property in Balikpapan

Flipping property is when we advise clients to buy a Balikpapan property below market value, renovate it and then make a profit by selling it at a higher price, all within a few months, and often before the Balikpapan market has a time to react to the renovation.

The Flipping Strategy in Balikpapan

Investment property flipping in Balikpapan is a simple strategy. You find a property that is in need of renovation from our list and purchase it for a low price. These type of Balikpapan real estate investments are sometimes referred to by professionals as ‘distressed’ Balikpapan real estate.

What is distressed Balikpapan property:

  • Balikpapan property in need of renovation
  • Balikpapan real estate with a change of puropose and use
  • Oversold Balikpapan property
  • Bank repossessions in Balikpapan

Put simply, long term investors in Balikpapan purchase the property, renovate it and make it a lot more attractive to potential buyers.

Calculate profit that you make from Balikpapan investment property flipping:

Final Selling Price less Cost of Purchase less Costs = Profit

Here is an example:

Balikpapan property purchase price: $220,000

Renovation costs: $20,000

Other costs: $25,000

Property sale price: $400,000

Profit: $135,000

Experienced property developers in Balikpapan use a minimum profit value of 22% when looking at potential Balikpapan projects. The reason for this is because there are lots that can go wrong in Balikpapan property flipping and working on a potential margin of 22% should still leave a good margin of error.

Luxury Property in Balikpapan

For luxury property investors hoping to add a superb property in {AsainCity} to their luxury real estate investment portfolio, Physis Realty is a trusted partner.

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A world leader in luxury real estate with a portfolio comprising some of the most sought-after real estate in Balikpapan, Physis Realty caters particularly to high net-worth individuals and families in Asia. A luxury real estate investment in Balikpapan should be entrusted to only the highest-quality agency.

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